Today's column looked at how Paul Allen's early bet on Starwave led to Disney running its Internet group in Seattle.

Looking back, it seems Allen's investment in Starwave did more to build a tech industry cluster in Seattle -- around online media -- than his more focused effort to develop a biotech hub in South Lake Union.

Part of it is timing. Starwave caught a wave that was just rising, while the proliferation of biotech ventures crested before Allen finished developing most of the offices in the area.

Now Starwavers are managing or running other online ventures and Allen's South Lake Union development is full of condominiums and offices mostly rented by existing companies in other industries, including Microsoft, Group Health, Amazon.com and Tommy Bahama.

Among the Starwave alumni still building companies is the former chief executive, Mike Slade, who e-mailed today to clarify a few details. Specifically he said the $100 million price of Starwave's sale to Disney that I mentioned was too low.

The exact sale price never came out -- I pulled the $100 million from early, unconfirmed stories and did a poor job characterizing it today -- but Slade pointed to a later piece with more specifics and filled in some of the gaps himself.

This late 1998 story cites a Disney executive saying that Allen sold his stake in Starwave for $300 million in cash and stock. Slade said Disney's initially bought about three-eighths of the company at a valuation of $250 million.

When Disney bought the rest of Paul's shares in 1998, the price wasn't disclosed. But employees still held the majority, Slade said, and had a nice windfall when Disney turned around and merged the company with Infoseek, creating a company worth nearly $1 billion.

Disney's financial reporting on the deals were a little opaque, but the company recognized a $345 million non-cash gain from its 1998 transfer of Starwave to Infoseek.

If you miss dot-com era financial statements, or need a little nudge to get the afternoon nap started, here's how Disney explained the outcome in its February 1999 10-Q:

Net income and diluted earnings per share for the quarter decreased 18% and
19% to $622 million and $0.30, respectively. These results were driven by a
decline in operating income, an increase in net interest expense and equity in
Infoseek's loss, partially offset by the gain on sale of Starwave and lower
expenses associated with corporate and other activities. Decreased operating
income reflected significantly lower results from Creative Content and
Broadcasting activities, partially offset by improvements from Theme Parks and
Resorts. Net interest expense increased due to gains from sales of investments
in the prior year quarter and higher average debt balances in the current
quarter. Net expense associated with corporate and other activities reflected
improved results from the Company's equity investments, including Euro Disney,
A&E Television and Lifetime Television. Excluding the Starwave gain and the
impact of Infoseek, operating income, net income and earnings per share were
$1.0 billion, $470 million and $0.23, respectively.

On November 18, 1998, the Company completed its acquisition of a 43% equity
interest in Infoseek, an internet search company (discussed more fully in
footnote 3 to the financial statements). In that transaction, Infoseek exchanged
shares of its common stock for the Company's interest in Starwave Corporation,
an internet technology company. As a result of the exchange of its Starwave
investment, the Company recognized a non-cash gain of $345 million. Also during
the quarter, the Company recorded $30 million of amortization related to
goodwill and other identifiable intangible assets and a charge of $44 million
for purchased in-process research and development expenditures, which have been
reflected in "Equity in Infoseek loss" on the Company's Condensed Consolidated
Statements of Income. Acquired intangible assets are being amortized over a
period of two years.

The Company determined the economic useful life of acquired goodwill by
giving consideration to the useful lives of Infoseek's identifiable intangible
assets, consisting of developed technology, trademarks and in-place workforce.
In addition, the company considered the competitive environment and the rapid
pace of technological change in the internet industry.

Disney had to revisit that "economic useful life of Infoseek." It rebranded the search portal and scrapped it in early 2001 - but, as Rick Martinez said in today's piece, the company stuck with its Seattle outpost.

Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.